Inverse Condemnation Claim – The intentional act element

  
INVERSE CONDEMNATION - WHAT MAKES FOR A VIABLE CLAIM?
  

“Inverse condemnation occurs when (1) a property owner seeks (2) compensation for (3) property taken for public use (4) without process or a proper condemnation proceeding.”  City of Houston v. Norcini, 317 S.W.3d 287, 292 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (quoting Villarreal v. Harris Cnty., 226 S.W.3d 537, 541 (Tex. App.—Houston [1st Dist.] 2006, no pet.)); see City of Abilene v. Burk Royalty Co., 470 S.W.2d 643, 646 (Tex. 1971). 

To state a cause of action for inverse condemnation under the Texas constitution, a plaintiff must allege (1) an intentional governmental act; (2) that resulted in his property being taken, damaged, or destroyed; (3) for public use.  Gen. Servs. Comm’n, 39 S.W.3d at 598.
  
SOURCE: EASTLAND COURT OF APPEALS - 11-11-00137-CV – 5/3/2012

 
The City asserts that appellee failed to allege facts that show an intentional act of the City.  If the government knows that specific damage is substantially certain to result from its conduct, then takings liability may arise even when the government did not particularly desire the property to be damaged.  Jennings, 142 S.W.3d at 314.  Thus, when a governmental entity physically damages private property in order to confer a public benefit, that entity may be liable under Article I, section 17 if it (1) knows that a specific act is causing identifiable harm or (2) knows that the specific property damage is substantially certain to result from an authorized government action—that is, that the damage is “necessarily an incident to, or necessarily a consequential result of” the government’s action.  Tex. Highway Dep’t v. Weber, 219 S.W.2d 70, 71 (Tex. 1949); accord Tarrant Reg’l Water Dist. v. Gragg, 151 S.W.3d 546, 555 (Tex. 2004).

Appellee alleged that the City inspector knew she had a leak inside her property; her pleadings state that an inspector initially found only one leak, and it was inside appellee’s property at the toilet cutoff.  Appellee also alleged that she told the City that she was still being billed for water usage and that, at some point, the City replaced a pipe in the alley on the outside of her property.  Her pleadings describe a leak, in addition to the one inside her property, that the City admitted was “in their plumbing.”

However, appellee has not alleged that the City took a specific action that it knew was substantially certain to result in specific property damage to her property.  Appellee does not explain, in relation to when her property was damaged, when the repair to the leak in the alley was made or when her calls to the City were made.  Appellee did not live at the property in question and did not discover the damage until after its occurrence, and her pleadings did not state with any specificity when or how the damage was alleged to have occurred.  Her claim that the City’s representatives knowingly misrepresented facts about the existence of a leak or about checking the property is, thus, unsupported by factual allegations.

Taken as true, all that appellee’s pleadings establish is that there was a leak at some point in the City’s plumbing and that, at some point, the City repaired it. Appellee did not allege that the City intentionally caused the leak.  At most, the City’s actions in discovering and repairing the leak were negligent.  See Coyne v. Kaufman Cnty., 144 S.W.3d 129, 135 (Tex. App.—Eastland 2004, no pet.) (“An allegation that a person or entity failed to undertake an act it should have taken constitutes an allegation of negligent conduct.”).  Viewed in the light most favorable to appellee, the pleadings fail to allege an intentional act of the City rising to the level required to maintain a claim for inverse condemnation.  The trial court erred when it denied the City’s plea to the jurisdiction as it pertained to the inverse condemnation claim.  The City’s first issue on appeal is sustained.  If the exaction claim is a takings claim as argued by appellee, then for the same reasons (in addition to the ones earlier stated when we discussed a constitutional exactions case), we sustain the City’s Issue No. 3.   

SOURCE: EASTLAND COURT OF APPEALS - 11-11-00137-CV – 5/3/2012

Takings / inverse condemnation claims: When is the govermental entity immune?

Dallas Court of Appeals analyzes the current state of the law on governmental takings

Dallas City Hall

The City of Dallas v. CKS Asset Management, Inc.  



The Texas Constitution provides that “[n]o person's property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation . . . .” Tex. Const. art. I, § 17(a). Therefore, to establish a takings or inverse-condemnation claim, a claimant must show: (1) an intentional act by the government (2) in a taking of the claimant's property (3) for public use. State v. Holland, 221 S.W.3d 639, 643 (Tex. 2007); see also City of Dall. v. VRC, LLC, 260 S.W.3d 60, 65 Tex. App.-Dallas 2008, no pet.) (inverse condemnation); Brownlow v. State, 251 S.W.3d 756, 760 (Tex. App.-Houston [14th Dist.] 2008) (claimant must also have compensable interest in the property at issue), aff'd, 319 S.W.3d 649 (Tex. 2010). By this express constitutional waiver, governmental immunity does not shield a municipality from an action for compensation under the takings clause. Sw. Bell Tel., L.P. v. Harris Cnty. Toll Rd. Auth., 282 S.W.3d 59, 61 (Tex. 2009). Whether particular facts are sufficient to constitute a taking is a question of law. Brownlow, 251 S.W.3d at 760.

Inverse Condemnation and Takings Claims

INVERSE CONDEMNATION Generally, “„[i]nverse condemnation‟ occurs when property is taken, damaged, or destroyed for public use without process or without proper condemnation proceedings, and the property owner attempts to recover compensation.” Patel v. City of Everman, 179 S.W.3d 1, 7 (Tex. App.—Tyler 2004, pet. denied) (Patel I). “A city is not required to make compensation for losses occasioned by the proper and reasonable exercise of its police power.” City of College Station v. Turtle Rock Corp., 680 S.W.2d 802, 804 (Tex. 1984). Whether the exercise of a police power is proper or whether it constitutes a compensable taking is a question of law and not of fact. Id. A municipality may, by ordinance, require the demolition of a dilapidated building that is a hazard to the public‟s health, safety, and welfare. See Tex. Loc. Gov‟t Code Ann. § 214.001(a)(1) (West Supp. 2010). Generally, when a city has determined that a building constitutes a public nuisance, the city‟s administrative determination may be challenged by a judicial review for substantial evidence. See Patel v. City of Everman, No. 2-07-303-CV, 2009 WL 885916, *6 (Tex. App.—Fort Worth Apr. 2, 2009, pet. filed) (mem. op.) FEDERAL FIFTH AMENDMENT TAKINGS CLAIM [ Property owner ] also challenges the trial court‟s dismissal of her federal “takings” claim. See U.S. Const. amends. V, XIV. Generally, the Fifth Amendment‟s Just Compensation Clause grants to a landowner the right to seek compensation for land taken by the State. U.S. Const. amend. V (“[N]or shall private property be taken for public use, without just compensation.”). Nevertheless, not every State action in taking property violates the Just Compensation Clause. “[I]f a State provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation.” Williamson Cnty. Reg’l Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 195, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985) (In a zoning case, landowner‟s federal taking and due process claims were not ripe because the landowner had not sought a variance). Compensation is generally not required when the State takes property to protect the public safety and health. The United States Supreme Court has stated: “The power which the states have of prohibiting such use by individuals of their property, as will be prejudicial to the health, the morals, or the safety of the public, is not, and, consistently with the existence and safety of organized society, cannot be, burdened with the condition that the state must compensate such individual owners for pecuniary losses they may sustain, by reason of their not being permitted, by a noxious use of their property, to inflict injury upon the community.” Mugler v. Kansas, 123 U.S. 623, 669, 8 S.Ct. 273, 31 L.Ed. 205 (U.S. 1887). “The government may not be required to compensate an owner for property which it has already lawfully acquired under the exercise of governmental authority other than the power of eminent domain.” Bennis v. Michigan, 516 U.S. 442, 452, 116 S.Ct. 994, 134 L.Ed.2d 68 (1996) “Courts have consistently held that a State need not provide compensation when it diminishes or destroys the value of property by stopping illegal activity or abating a public nuisance.” Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 492 n.22, 107 S.Ct. 1232, 94 L.Ed.2d 472 (1987). SOURCE: Beaumont Court of Appeals - 09-10-00192-CV - 6/2/11 (City engaged in a valid exercise of its police power to abate a nuisance that existed on landowner's property. See Tex. Loc. Gov‟t Code Ann. § 214.0012.)

Regulatory Taking vs. Physical Taking of Private Property by Government

GOVERNMENTAL TAKINGS: Dispossession/expropriation of Land vs. Regulatory Taking

THE TAKINGS CLAUSE – FEDERAL AND STATE CONSTITUTIONAL PROVISIONS

The Just Compensation Clause of the Fifth Amendment states, “[N]or shall private property be taken for public use, without just compensation.” U.S. Const. amend. V; Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 933 (Tex. 1998).

Article I, section 17 of the Texas Constitution similarly provides in pertinent part that no “person’s property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made . . . .” Tex. Const. art. I, § 17; Mayhew, 964 S.W.2d at 933.

“At the heart of the takings clause lies the premise that the government should not ‘forc[e] some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”’ Tarrant Reg’l Water Dist. v. Gragg, 151 S.W.3d 546, 554 (Tex. 2004) (quoting Steele v. City of Houston, 603 S.W.2d 786, 789 (Tex. 1980)).

CLASSIFICATION OF TAKINGS BY GOVERNMENT:

Physical Taking versus Regulatory Taking

Takings can be classified as physical or regulatory. Mayhew, 964 S.W.2d at 933. Because “there are several sharp distinctions between physical takings and regulatory takings,” it is “often inappropriate to treat cases involving one as controlling precedents for the other.” Lowenberg v. City of Dallas, 168 S.W.3d 800, 801-02 (Tex. 2005) (citing Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 535 U.S. 302, 323-24 (2002)).

Physical takings occur when the government authorizes an unwarranted physical occupation of an individual’s property. Mayhew, 964 S.W.2d at 933. Physical possession is, categorically, a taking for which compensation is constitutionally mandated. Sheffield, 140 S.W.3d at 669-70.

In contrast to a physical taking, a restriction on the permissible uses of property or a diminution in its value resulting from regulatory action within the government’s police power may or may not be a compensable taking depending on the circumstances. Id. ‘“[A]ll property is held subject to the valid exercise of the police power’ and thus not every regulation is a compensable taking, although some are.” Id. at 670 (quoting City of College Station v. Turtle Rock Corp., 680 S.W.2d 802, 804 (Tex. 1984)).

A plaintiff potentially may invoke multiple distinct theories in challenging a government regulation as an unconstitutional taking. The plaintiff may assert (1) a physical taking, which occurs when regulatory action requires an owner to suffer physical invasion of his property;[5] (2) a Lucas-type total regulatory taking, which occurs when regulatory action completely deprives an owner of all economically beneficial use of his property;[6] (3) a Penn Central taking, which occurs when regulatory action unreasonably interferes with a property owner’s right to use and enjoy his property;[7] or (4) a land-use exaction, which occurs when the government requires an owner to give up his right to just compensation for property taken in exchange for a discretionary benefit conferred by the government.[8] Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 548 (2005); see Sheffield, 140 S.W.3d at 671-72.

Footnotes:

[5] A “regulatory action that generally will be deemed a per se taking” and, thus, requires just compensation occurs “where government requires an owner to suffer a permanent physical invasion of property — however minor.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538 (2005); see also Sheffield, 140 S.W.3d at 671.

[6] “[R]egulations that completely deprive an owner of ‘all economically beneficial us[e]’” of his property are deemed per se takings. Lingle, 544 U.S. at 538 (quoting Lucas v. S. Carolina Coastal Council, 505 U.S. 1003, 1019 (1992)) (emphasis in original); see also Sheffield, 140 S.W.3d at 671.

[7] A regulatory taking occurs when the government has unreasonably interfered with a property owner’s right to use and enjoy his property considering the following three factors: (1) “the economic impact of the regulation on the claimant;” (2) “the extent to which the regulation has interfered with distinct investment-backed expectations;” and (3) “the character of the governmental action.” See Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124 (1978); Sheffield, 140 S.W.3d at 672.

SOURCE: Houston Court of Appeals 14-09-00701-CV 5/3/11

LEGAL TERMS: Inverse condemnation claim | government exercise of eminent domain powers | regulatory taking | physical invasion of property | expropriation